The StratigicPay Blog's primary writer is on vacation for the next couple of weeks, but that won't prevent us from supplying you with some of the thought leaders in the field.  Today's guest post is from fellow Compensation Cafe blogger Chuck Csizmar. Chuck is one of the several great writers at the Cafe'.

Why Managers Don't Manage Pay

When an employee is promoted to their first manager's position, they are given the proverbial Keys to the Kingdom – your company.  They now have the authority to spend your company's money.  From hiring, to promotions, to salary reviews and equity adjustments they are now able to make the decisions that directly impact (increase) your labor costs.

However, most of these managers turn out to be, at best, well intentioned amateurs at the process of making pay decisions that are appropriate for the needs of the business.   Fresh from being anointed they often lack the basic internal education necessary to make business vs. emotional decisions – and their actions commit you and the company to costs that may not be in your company's best interests.

Actions taken by these managers not only increase direct costs, but often irritate other staff members as the circumstances become known, creating morale and internal equity problems at the same time.  The net result is usually a corresponding lack of engagement and ultimately separations by disenchanted employees. 
 
Note:  Most employees leave managers, not companies.  Thus actions do have consequences.  Likely this is not what you envisioned when you made that promotional decision. Now, how did (fill in the name of your company here) get themselves into this mess? First of all, no one really trains managers on how to properly attract and reward employees via base salaries and incentive pay.  A few anecdotal examples:

• Just because some bloke is a good "XYZ Operator" does not mean they will be an equally good "XYZ Manager".  The skill sets for success are dramatically different.
• How many managers understand your company's philosophy about pay?  Do you?  How many understand the workings (the what and the why) of the company's pay practices and methodology?  These are the folks responsible for spending 40% to 60% of your revenue in the form of employee pay, and even the most well-intentioned is prone to make mistakes.
• Managers want to be liked; they do not wish to pick favorites, do not want to discriminate on the basis of performance and definitely do not want to have their decisions challenged.  They would rather point a finger at HR and assign the blame to them for having to assess performance and distinguish one employee from the other.  Left to their own devices they would give everyone as much as they can.

If you were a high performing employee, would you like to work for this sort of Manager?  If you were coasting at work, barely putting your time in, would you want to work for this sort of Manager?  Which sort of employee do you think will eventually tire of being undervalued, and quit?   Leaving the Manager with a staff of . . . .  You get the picture.

Ineffective managers are always afraid that an unhappy employee will decide to quit, but that is usually a selfish thought.   Their prime concern is more often what your departure would mean to their deliverables, to their reputation as a manager.  Your departure is typically viewed as an inconvenience to them, not an avoidable loss for the company.  A reflection of this is when managers resist a transfer that is clearly in the employee's career interests.  The manager's concern is how that transfer affects their department – and whether their personal success becomes that much more difficult to attain.
 
Ineffective Managers can be a defensive lot, challenging attempts at reform.  Why?  Because of their fear that spotlighting reform action will demonstrate their ineffectiveness (make them look bad), and that is unacceptable.  Typically their advantage within the company is that the more ineffective the manager, the stronger their political connections.   And as senior management oftentimes surround themselves with those most agreeable to their own way of thinking, it's not surprising.

Assuming the company's willingness to make key decisions and the presence of the all-important support from senior management, companies can correct the problems that they've created.  They can:

• Select candidates for management positions on the basis of their skills / potential for actual management (dealing with people, managing projects, business-oriented, professional demeanor, etc.)
• Educate Managers in the philosophy and methodology of the company's pay programs, ensuring that this information is shared with their staff
• Construct job specifications that call for a Manager to manage, as a prime accountability, limiting or even eliminating the retention of individual contributor responsibilities.
• Measure and reward the performance of the Managers  primarily on the basis of how they have actually managed their employees, or on the performance of their unit
• Encourage Managers to develop the potential of their employees, to the point that a staff member being promoted / transferred upward is a mark of success for the Manager
• Ensure that procedural checks and balances are in place to ensure that pay decisions are reviewed by at least one higher level
• Hold Managers to an annual salary budget; let them develop the budget and monitor/adhere to it during the year

Consider the above as a checklist that can be used to test your company's vulnerability to wasted money, employee morale problems / turnover and avoidable cost increases. 
Would you be comfortable with how your own company would score?

My advice to clients is to face these issues straight on, to implement policies & procedures that save money without penalizing high performers or mistreating their employee base.  But the challenge will always remain, as there is an inherent reluctance on the part of many managers to make the tough decisions, because we do want to be liked, we do like to give good news, and we do not like to play judge and jury with an employee's career. But that behavior is not managing is it?

This post is from derived from my recent post at the Compensation Cafe.

After more than two decades of slow but steady erosion and a few body blows in the recent recession, the state of job satisfaction, and more importantly the state of the overall employee-employer relationship, are at new generational lows. Employee morale is in the tank, and the willingness of workers to bolt at the next opportunity is at a multi-year high. Numerous studies have shown these trends, including the recent Conference Board report, which confirmed the multi-decade low in job satisfaction.

The 2008-2009 recession was a real punch in the gut to an already injured relationship between employers and their most "valuable" asset (at least that's what a lot of annual reports say). Between the massive layoffs, skimpy or non-existent pay increases (or outright pay cuts), and with the on-going push for "doing more with less," the foundation of the employee-employer relationship has weakened considerably over the years and is in need of some serious shoring up.

Some HR and compensation professionals have told me they think "engagement" is an overused buzzword. Even you may believe this, but just think about your typical "dis-engaged" employee and ask yourself how much value they bring to your organization?  Buzzword or not, having employees who are actively engaged in their work and believers in their organization and leadership is absolutely critical to organizational performance and maintaining a psychologically-healthy workplace, where people tend to thrive and stay.

So, what's an employer to do? How can we enhance this somewhat nebulous "engagement" concept?  If you're looking for simple/easy, "plug-and-play" solutions, they don't really exist, but here are several areas that merit your consideration:

• Increased/enhanced communication: nearly every broad-based or organizational study I've seen has shown a desire on employees' part for more communication, about their organization and their goals, and especially about their job expectations and performance. Communication takes some time and effort, but it's virtually free to provide it, so why do so many organizations fail in this key element of management and leadership?
• Increased transparency: who doesn't want to know how and why they are paid what they are? The more open you can be about your compensation philosophy/strategy, and how as an organization you're meeting the goals of your compensation program, the better off you'll be in the minds of your employees. Transparency fosters trust, while a lack of it may foster distrust.  If you have a soundly-built and competitive rewards program, what's to hide? Share the truth! I am not suggesting total transparency or gritty behind-the-scenes details, but if you've got a program you can be proud of, share it, and how your organization's' approach is a win-win for the organization and its employees.
• Recognition: recognition is the missing link in many rewards programs, and a failing of most management teams.  Can you catch your employees performing highly, going above and beyond, or notice those who provide great customer service on a regular basis? Are you ready and willing to provide genuine appreciation and recognition for/to your most valuable asset?  Recognition, a corollary of communication, is inexpensive to deliver, but can provide great psychological benefits for your workforce, and eventually to those who practice it genuinely.
• Listen, trust and empower: this may not come easy for some managers, but managers who can learn to listen better, trust in their staff, and delegate more responsibility and authority (and with the resources/tools to handle it) will find that most employees respond quite favorably to this approach. While some staff want to be led by the hand, most workers want to be heard, to have input into their work, and have the trust, resources and authority to get it done.
• Develop thy managers: Have you ever heard the phrase that people don't leave their jobs, they leave their manager (or company leadership)? Well, in most cases it's true. People tend not to leave managers and companies they respect and like working for, but they do tend to leave ones they don't believe in. Thus, it's critical that companies train and develop their management teams, as well as reward their best people managers, while dealing with the ones who aren't (see next point).
• Get your management performance act together: organizations that don't address performance issues within their management/leadership teams are destined to have morale and dis-engagement issues within their non-management ranks. Working for a poor manager makes your work life suck, is the single biggest contributor to turnover and poor morale, and is a guaranteed "engagement killer."
• Cash compensation: let's not forget that most folks are to at work trying to make a living for themselves and their families. But notice, it's nowhere near the top of my list. Dollars are very important, but you can't buy workplace love. If you were one of the many employers that engaged in wage cutting and other forms of pay-related retrenchment during the recession, then the first thing you should be thinking about is getting at least back to where you were prior to those cuts.  After that, it's time to start thinking (or re-thinking) about competitiveness with the external market for your talent. Paying competitively won't guarantee you anything, but it should reduce pay-related turnover, and enhance your ability to attract and keep talent. Don't believe that just because the labor market is a mess right now that it renders this topic as unimportant. Staying competitive always important, as there is always a market for top talent.  Several studies have shown that a high percentage (over 50%) of the workforce is ready to move onto the next opportunity when it presents itself, so don't help push them out the door by ignoring this critical aspect of the "employment deal."
• Developmental opportunities for professionals: when times get tough, training and development budgets are usually one of the first things to be cut. If that's the case at your organization, you should help to make it one of the first things to be restored. Beyond being appreciated, communicated with and paid fairly, the opportunity to learn, grow and develop is high on many people's importance list. A lack of growth and learning opportunities is a significant competitive disadvantage for any employer, but especially in the so-called "knowledge" industries (technology, scientific, engineering-related, etc.) where ongoing education and learning form the collective knowledge backbone of the organization.

Well, that's my list.  I'd like to hear your thoughts too.  Go forth and actively nurture satisfied, motivated and engaged workers!

Doug Sayed is principal at Applied HR Strategies, a Seattle area compensation consultancy and lead author of the StrategicPay Series Base Pay Toolkit, a hands-on, "do-it-yourself" (DIY) guide to developing a strategic market-based compensation program, complete with dozens of pre-built tools and templates, ready for use.

The Five Domains of High-Performance Organizations
i4cp identifies the five key areas in which High-Performance Organizations excel

Seattle, WA (January 21, 2010) - After conducting thousands of studies that cover hundreds of issues related to productivity and the workforce, one thing is clear: there is no single organizational element that is correlated with high performance. Rather, there are five.

For decades, the research team at the Institute for Corporate Productivity (i4cp) has studied what separates high-performing organizations from their lower-performing counterparts. The results of that research have consistently shown that companies that excel in the following five domains are typically high performers:
•    Strategy
•    Leadership
•    Talent
•    Culture
•    Market

In December, i4cp set out to clarify the differences between high-performing and low-performing organizations across these domains, and to determine whether certain issues or traits have increased in importance in the current economic climate. The results were interesting, if not startling. The gap between higher-performing and lower-performing organizations has widened considerably from previous studies. Based on a scale from 1 to 7, high-performance organizations scored an average of 6.03 across these domains, compared with 2.88 for low performers.

"High-performance organizations all seem to recognize that, while excelling in these five areas is critical, these domains need to work together as an integrated system," said Kevin Oakes, CEO of i4cp. "The culture should be focused on the customer and reflective of the organization's talent, which in turn feeds off the leadership, who need to be aligned with the strategy, etc. If one domain is ignored or inefficient, the system breaks down. This five-domain system also contains many important sub-domains - our members would recognize them as knowledge centers -that are just as critical to explore."

Specifically the new study found the following in each domain:

1. Strategy
High-performance organizations outscored low performers by 6.14 compared with 2.58 in the critical area of Strategy. In looking at specific areas of strength vs. weakness, it's clear that an organization's strategic approach is vitally important to high performance. The common wisdom of "walk the talk" is an indispensable ingredient in high-performance organizations. If an executive says one thing and then does another, employees draw a variety of conclusions, most of them destructive to the organization.

Executives in high-performance organizations avoid these problems by ensuring that employees are clear about the strategic plan and the company's approach to business, and by ensuring that managers behave consistently. The study shows that the single most widely cited strategic practice among high-performance organizations was, "My organization's philosophy statement is consistent with its strategy." And the strategic practice in which high performers outstrip low performers the most is "Organization-wide performance measures match the organization's strategy," followed by "Organization's strategic plan is clear and well thought out."

2. Leadership
In Leadership, the gap between high-performance and low-performance organizations was 5.96 compared with 2.47. The study found that one of the most widely agreed-on leadership-related strategies is ensuring that "Everyone is clear about the organization's performance expectations." Another important factor associated with high performance is "Making sure employees believe that their behavior affects the organization." Leaders can't do their jobs alone. They must be able to convince others of just how important their own behaviors are to the success of the whole organization.

A third factor that was strongly associated with performance was the idea that "Management promotes the person who has the best skills and knowledge to do the job." Performance tends to be higher in organizations where promotions are based on talent and merit rather than on other factors, such as organizational politics.

3. Talent
With high-performance organizations scoring 5.82 in Talent, compared with 2.73 for low performers, the gap between the two is certainly wide. High-performance organizations know that effective Talent Management moves beyond a focus on HR practices, processes and systems, to a strategic approach that is linked to business outcomes. This begins with stepping outside of HR and looking at the organization from an outside-in perspective. This entails identifying the business model components and areas that drive value, and determining what the organization needs. It enables organizations to take a holistic approach to treating employees as individuals, while managing and making decisions based on data-driven information, all of which benefit the organization as a whole.

4. Culture
The difference between high and low performers in the all-important Culture category is 5.99 compared with 2.94. Being seen as a "good place to work" is a solid indicator that an organization is a high performer in this domain. Not only is this characteristic the most widely cited by high-performance organizations, it's also the biggest differentiator from low performers. High-performance organizations are also well aware of external factors - such as customers, markets and competitors - and they are ready to take on new challenges. Another element of culture that's relatively strongly correlated with high performance is a commitment to innovation and internal fostering of creativity.

5. Market
High-performance organizations scored very high in market or customer focus (6.23) vs. lower performers (3.69). The research shows that high performance is associated with a strong emphasis on customer service, including vigorous efforts to serve customers better than anyone else in the industry. High performance is linked with the use of "Customer information as the most important factor related to developing new products and services." High-performance companies are usually organized internally around what's best for the customer, and their strategy is based on customer data.

"The study reaffirms i4cp's focus on its 44 ongoing research projects, and our discoveries to date on high-performance organizations," Oakes commented. "Throughout 2010, i4cp will be launching new iterations of its most important studies - on such topics as leadership agility, customer-focused workforces and strategy execution and alignment - to see which tactics, strategies and practices high-performance organizations are using in this economic climate."

The High-Performance Organization Survey was conducted by i4cp in December 2009. The full results of the survey are available exclusively to i4cp corporate members.

About i4cp, Inc.

i4cp is the world's largest vendor-free network of corporations focused on building and sustaining a highly productive, high-performance organization. Through a combination of peer networking, human capital research, tools and technology, we enable high performance by:
•    Revealing what high-performance organizations are doing differently
•    Identifying best and next practices for all levels of management
•    Providing the resources to show how workforce improvements have bottom-line impact
With more than 40 years of experience and the industry's largest team of human capital

WorldatWork Survey, January Update: Pay Cuts Not as Prevalent as Pay Freezes in 2009
 
January 19, 2010 – Washington, D.C. – In response to the sluggish economy, many corporations either froze or cut pay in 2009. Even as the economy starts showing signs of life, a majority plan to remain conservative when it comes to pay practices in 2010. The WorldatWork 2009-10 Salary Budget Survey, January 2010 Update (fielded in October 2009), found that 52% of U.S. employers froze pay for some or all employees in the 2009 recession, while 13% cut pay.
 
Will employees see their pay restored in 2010? At least 22% of organizations that froze pay in 2009 are planning to prolong the freeze into 2010, while 54% plan to resume normal pay activities this year. More than a third said they were in a recession (in October) and were not in a position to unfreeze pay.

 Of those organizations that cut pay, 37% said they remained in a recession and were not yet considering recovery actions; 29% planned to restore pay in full, while 15% said the pay cuts were permanent.
 
"Employers are taking a 'wait and see' stance when it comes to returning to normal pay practice," said Jim Stoeckmann, CCP, compensation practice leader at WorldatWork. "There are risks both ways. Moving too fast in restoring salaries and merit budgets leaves employers vulnerable if the recovery fails to materialize. Moving too slowly creates the risk of turnover as employees look for a better opportunity with another company. Even with jobs scarce, there are always opportunities for employees with the right skill set."
 
As salary budgets remain tight and employee satisfaction low, organizations are turning to other ways to motivate and reward employees. Employers are focused on providing or enhancing career development opportunities (33%), non-cash rewards and recognition (28%), leadership training on employee motivation (21%), flexibility options (20%), monetary rewards for high performers (19%), and monetary rewards for mission-critical talent (15%).
 
"With lower than normal employee satisfaction levels, it is crucial for employers to center the employee value proposition on the entire total rewards package," said Alison Avalos, research manager for WorldatWork. "Employers can cultivate employee loyalty by highlighting non-cash rewards, particularly for key employees. These programs validate the employee's time, effort and talent, even in the absence of salary increases."
 
About the Survey:
The WorldatWork 2009-10 Salary Budget Survey, January 2010 Update was fielded in October 2009. Survey respondents are WorldatWork members employed in the HR, compensation and benefits departments of mostly large U.S. companies. N = 875.

2009 was a real wake up call for just about everyone, and it was one for a lot of HR and rewards professionals too.  The merit pay budget cuts (or eliminations and/or actual pay reductions), mass layoffs, rising fear and plummeting morale rocked the employee-employer relationship to its core.

But wake up calls can be a good thing too.  Right out of college, between undergraduate and graduate school, I was a crisis counselor at a mental health center emergency services unit. I learned a lot about life there, and one of the many lessons I took away was that sometimes you have to hit rock-bottom before, before you can start climbing back up (2009 was rock bottom, let's hope).

If you're an HR or rewards pro responsible for dealing with issues like employee relations, organizational change efforts, and "motivating the troops," than maybe 2009 should have been your wake up call.  After the the past 18 months of budget cutting, layoffs and other forms of retrenchment, the foundation of the employee-employer relationship is looking a bit shaky and in need of reinforcement and/or rebuilding.

Shoring up employee engagement (or re-engagement) or should become a clarion call for us in the "people" business.  So will addressing the issue of employee retention, as numerous studies have shown that a large slice of the labor force is ready to bolt for greener pastures when the opportunity presents itself.  It's quite likely that engagement will become the "new" retention, as happy and engaged employers tend not to bolt for the proverbial greener pastures, because they already feel pretty good about the pasture they're already in.

Many compensation professionals will say that restoring the 2009 take-ways, and addressing competitive pay gaps are key for employee retention. And while I can't disagree with this conceptually, since dollars do matter, I believe the issues needing attention go far deeper than just dollars alone. 

It's about addressing the relationships we have with our people and restoring (or building from the ground up) a sense of belonging, a sense of appreciation and recognition; and a true valuing of the workforce that has come under a silent (but morale-crushing) attack in recent years, even if its been totally unintentional.

I saw a good post last month about workplace trends and issues for 2010 by the Herman Group, and thought it's a good (and brief) read on some of the issues being discussed here.

Over the next couple of months, I'll try and address some of these issues in more detail. 

Until then, I hope your 2010 is off to a great start!

Incentives have been a very hot topic on the WorldatWork community website lately, generating more comments than any topic to date. Some say they work, some say they don't, and some folks just just got downright nasty about it. 

To see my take, see my post at the Compensation Cafe.

Most HR professionals would agree that happy (or at least satisfied) employees generally make better employees overall.  They tend to complain less, show up more, and make for a better work all-around environment.  Most HR professionals would also likely agree that more satisfied employees are also generally are more engaged and better performers overall.  For these reasons alone, it's worth it to try to build and maintain a happy/satisfied workforce.

But assuming increased job satisfaction automatically leads to increased job performance is a false assumption.  Many HR professionals believe that if we can just increase job satisfaction/happiness, that this will increase job/organizational performance in the process, but this is where the relationship breaks down.  Just because more satisfied employees tend to be better performers, does not mean that increased satisfaction causes increased job performance.

In reality, the satisfaction = performance equation should be reversed. If employees are successful at work, they tend to be more happy.  They tend to feel better about themselves, their work, and are more engaged and invested in what they do.  As a manager, if you can teach and lead employees towards improved job performance, you will also end up with more satisfied and happy employees in the process, and fantastic "two-fer" to have as a manager (better performance and morale).

A recent discussion on the LinkedIn HR Executives Network and a great article on the the Street.com reminded me of this topic. I've wanted to write about it for some time, and these reminders finally got me going. 

The Street.com article started out by stating: "We've got a fundamental premise wrong. We believe that making employees satisfied will make them successful. That's not true. In fact, the relationship is reversed -- make people successful and they will be happy. Employees, at least those you want to keep, don't want to be indulged, they want to be successful." "Causality flows from success to satisfaction. We've got it backward." It then goes on to provide supporting studies and other evidence of this relationship.

So, if you want happy employees who are more engaged and less likely to become unwanted turnover, then help to make them successful, and you will be helping yourself, your organization, and your employees to be better off.

We need to stop trying to make people happy so they will perform better and/or turnover less.  Instead, help to make them successful in their jobs, and you'll get higher job performance, and several other beneficial outcomes in the process!

Some of my fellow bloggers at the Compensation Cafe' have been writing recently on how to address the issue of today's small merit budgets with employees and managers.  Here are a few links to help you with these issues:

• 10 Things Your Managers Must Tell Employees about Your Teeny, Tiny Merit Budget by Margaret O'Hanlon
• 10 Tools for Communicating a Teeny, Tiny Merit Increase Budget, by Margaret O'Hanlon
• Despite Pay Dissatisfaction, Most Employees Expect to Maintain Current Level of Benefits in 2010, by Becky Regan
• Show Your Creativity as a Rewards Professional, by Doug Sayed

In addition, I would add a few other key thoughts, such as:

• Job Titles: Are They Really Free? by Ann Bares
• Food for Thought: Pay for Performance Obsolete?, by Darcy Dees
• Agility. The New Reward Watchword, by Ann Bares via Compensation Force

So, while there may be a shortage of funds available for organizations to distribute, there is no shortage of ideas and creative strategies for addressing today's challenges.  If there was ever a time to show your worth as an HR and/or compensation professional, now would be it!

The StrategicPay Blog would like to thank  fellow Compensation Cafe' blogger Darcy Dees for her contribution of this excellent post.

Performance Reviews: Why Bother?

We've all seen the claims that performance reviews are (or at least should be) dead because
they don't do anything and no one likes giving or receiving them.  I have to admit that I'm
a bit old-school on this issue.  I think they're very important, and when done right, really
help.

Why are performance reviews important?  The biggest reason I still like performance reviews is because they give us a formal opportunity to celebrate success.  Good managers do this on an ongoing basis, but let's face it, not all managers are good managers.  While it is very important to say thank you and specifically praise good work as it occurs, there's also something powerful about listing all of the good work that's been done recently in one
setting.  It can really help to improve morale when someone looks at all they've accomplished.

I am a big believer in strengths-based performance management, so I think that celebrating successes should be the primary focus of the review.  Steve Roesler posted over at All Things Workplace about Peter Drucker and his thoughts on strengths-based performance management.  The following quote nicely sums up why I believe in this approach:

One should waste as little effort as possible on improving areas of low competence.  It
takes far more energy and work to improve from incompetence to mediocrity than it takes to improve from first-rate performance to excellence.  And yet most people--especially most
teachers and most organizations--concentrate on making incompetent performers into mediocre ones.  Energy, resources, and time should go instead into making a competent person into a star performer.

Steve also posted a very important caution about applying this principle as a rule that I
think must be read hand-in-hand with any discussion about strengths-based performance
management. 

I also believe that reviews are still important from a documentation standpoint.  Again, not
all managers document things as they should.  If an issue arises later, at least you'll have
something indicating that the appropriate discussions took place.

I believe the ultimate goal of performance management is to recognize, encourage, and reward employee behaviors that drive positive business results.  Performance conversations should help team members to capitalize on their strengths and manage their weaknesses.  Of course the ongoing daily conversations that supervisors have with their employees are much more effective and helpful at accomplishing this, but since those don't always occur as they should, I'm still a believer in performance reviews.

Darcy Dees works as the Compensation Manager for Rock Bottom Restaurants, Inc.,
headquartered in Louisville, CO.  She has been working in Compensation for over 5 years now and recently attained her Certified Compensation Professional (CCP) designation.  She spends what little free time she has hiking and reading.

The StrategicPay Series blog is happy to welcome back guest Blogger Theresa Chambers of Recognition Works.  See below for additional contact information.  Thanks Theresa!

While leg warmers and feathered hair may be making a comeback, let's make sure your recognition programs aren't stuck in the 80s. Whether you are creating a program from the ground up or revamping an existing one, here are some tips to bring your recognition practices into the 21st century.

Employee of the Month programs are so 80s. We've heard all the jokes, "Whose turn is it this month?" or "Let's give it to Joe, he hasn't gotten it in a while." The impetus for recognizing great work doesn't happen because you turned the calendar from August to September. It needs to be deserving, for sure, but it also needs to be based on criteria that reinforces employee behaviors aligned with company values.

No surprises. Surprise awards are more about the shock value for those watching than truly honoring the person you're trying to recognize. If you are going to receive an award, wouldn't you like to know ahead of time? Some people love the fanfare and applause, while others prefer their recognition in private. When it comes to recognition, one size does not fit all, so it's always best to ask employees how they like to be recognized.

Don't show them the money. Harvard Business School's thought leader, Rosabeth Moss Kanter, captured it well, "Compensation is a right. Recognition is a gift." While 85% of employees surveyed say they want cash awards, only 9% actually spend it on a special personal treat for themselves. Cash disappears. Awards should serve as a tangible reminder of the achievement. It can be as simple as a framed certificate with signed accolades from coworkers or a retrofitted Oscar trophy with a superhero cape renamed FRED (friendly, resourceful, enthusiastic and dedicated).

Think strategy, not program. Recognition needs to be more than once a year celebration where only a small percentage of employees are honored and everyone else watches. A strategy is ongoing and multidimensional. The most important element is the day-to-day thank-you and acknowledgment. It's about creating a culture of appreciation where it's up to everyone to "notice out loud" when someone does something right for the company.

Involve employees in designing the recognition strategy. People own what they create and want to see it succeed. Committees should represent a diagonal cross section of your organization and its unique culture. Identify Recognition Ambassadors throughout the company who serve as the go-to person for ideas and resources.

Storytelling is one of the most powerful forms of recognition managers can use. People pay attention to who gets recognized and why. An effective presentation should tell the story about what the employee did, the positive impact it had, and how it was an example of one or more of the company values. Use multiple communication vehicles to share employee achievements, including the intranet, recognition bulletin boards and the company's Facebook page to post pictures and give coworkers an opportunity to add their congratulations. This works great for remote employees.

Maximize your managers. People join a company for the pay or benefits, but it's an employee's relationship with their manager that determines whether or not they stay and how engaged they are. Research suggests that employees need to receive recognition and praise for doing great work every seven days to stay actively engaged. Thankfully, giving effective recognition is a leadership skill that can be learned. In fact, training managers on recognition skills increases the occurrence of recognition by up to 50%.

As your business goals evolve, so should your employee recognition strategy. Your core values may remain the same, but it's always a good idea to take a fresh look at your recognition practices. Here's to keeping the ZING in recogniZING!

Theresa Chambers is the Chief Motivation Officer of Recognition Works and founder of the Puget Sound Recognition Roundtable. Visit www.recognitionworks.net for more info.